United States v. Paul Emordi ( 2020 )

Case: 19-10400 Document: 00515416830 Page: 1 Date Filed: 05/14/2020
IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
United States Court of Appeals
Fifth Circuit
FILED
No. 19-10400 May 14, 2020
Lyle W. Cayce
UNITED STATES OF AMERICA, Clerk
Plaintiff - Appellee
v.
PAUL EMORDI; LOVETH ISIDAEHOMEN; CELESTINE OKWILAGWE,
also known as Tony Okwilagwe; ADETUTU ETTI,
Defendants - Appellants
Appeals from the United States District Court
for the Northern District of Texas
Before SOUTHWICK, COSTA, and DUNCAN, Circuit Judges.
LESLIE H. SOUTHWICK, Circuit Judge:
The four defendants were indicted for conspiracy to engage in Medicare
and Medicaid fraud in their operation of a home healthcare business,
continuing over a period of three years and causing over $3.5 million in losses.
All four were convicted after a jury trial. On appeal, two of the defendants are
challenging the sufficiency of the evidence, while the other two complain about
the validity of their sentences. We AFFIRM as to all defendants and claims.
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FACTUAL AND PROCEDURAL BACKGROUND
In 2001, Celestine Okwilagwe and Loveth Isidaehomen, who are
husband and wife, started a home health business called Elder Care Home
Health Services, LLC (“Elder Care”). They approached their friend, Gloria
Ogabi, to ask for permission to use her name in establishing the new business.
Ogabi “didn’t think much about it” and agreed. Eventually, Okwilagwe came
to Ogabi’s residence and asked Ogabi to sign paperwork, including the Elder
Care articles of incorporation. Ogabi did not know why Okwilagwe and
Isidaehomen needed her signature, but she signed because Isidaehomen was
“like a sister.” Later in 2001, Ogabi signed board meeting minutes reflecting
the resignations of Okwilagwe and Isidaehomen as Elder Care managers.
Ogabi, though, never participated in board meetings. Ogabi also signed Elder
Care’s initial application to become a Medicare provider, listing herself as
Elder Care’s owner despite having no ownership in the company. According to
tax records from 2011 to 2014, Okwilagwe and Isidaehomen remained Elder
Care’s owners.
In 2007, Ogabi began to worry about her name being on the Elder Care
documents. She asked Okwilagwe and Isidaehomen to remove her name, and
they falsely told her they did so. Elder Care continued to use Ogabi’s name as
the company’s owner in applications for Medicare revalidation. Elder Care
also used Ogabi’s name as the owner on its 2008 and 2015 ownership disclosure
forms submitted to the Texas Department of Health and Human Services,
which at the time was known as the Department of Aging and Disability
Services (“DADS”). Ogabi’s name continued to be used as Elder Care’s owner
on its 2015 recredentialing application to Molina Healthcare of Texas, a
managed-care organization contracting with the state of Texas to provide
Medicaid services in Texas, and to which Elder Care had to apply in order to
bill Medicaid.
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In 2012, the Texas Department of Health and Human Services Office of
Inspector General sent letters to Okwilagwe and Paul Emordi, co-defendant
here, informing them that they were “being excluded from participation in any
capacity in Medicare, Medicaid, and all Federal health care programs . . . for
the minimum statutory period of 5 years.” (bold and underline in original).
These exclusions resulted from Okwilagwe and Emordi’s pleas of guilty to
attempted theft arising from Medicaid fraud. Isidaehomen had been indicted
as a result of these same events, but her indictment was dismissed. Okwilagwe
and Emordi both appealed their exclusions, but neither appeal was successful.
Okwilagwe admits that he “continued to operate [Elder Care], under a
straw owner named Gloria Ogabi.” Emordi acknowledges that he knew he
should not have been working at Elder Care while he was excluded. Three
days after Okwilagwe and Emordi’s exclusions became effective, Isidaehomen
became an authorized signer on the Elder Care bank account ending in the
number 2858, the account into which Medicaid payments were deposited.
Isidaehomen also became the primary signer of checks issuing from that
account and from Elder Care’s bank account ending in the number 9574, into
which Medicare payments were deposited. Isidaehomen began writing checks
to Emordi’s wife, Mosunmola, and stopped writing checks to Emordi. FBI agent
Diana Hernandez testified that she discovered no evidence that Mosunmola
worked for Elder Care, though Hernandez remembered there had been
“someone” who had mentioned that Mosunmola had worked at Elder Care at
an undisclosed time.
According to Hernandez, Okwilagwe stated that he stayed on as the
manager and director of Elder Care and paid the employees and paid the bills.
During the exclusion period, Elder Care continued to bill Medicare and
Medicaid. According to FBI auditor Crystal Garcia, Elder Care received more
than $3.5 million from Medicaid and Medicare during the exclusion period. In
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the company’s 2015 renewal application with Molina Healthcare, co-defendant
Adetutu Etti — Nursing Director for the company — certified that Elder Care
did not “currently employ any person who has been or is currently excluded
from participation in a government program (e.g., Medicare, Medicaid).” In an
Elder Care contract renewal with Superior Healthplan, another managed-care
organization similar to Molina Healthcare, Etti certified that Elder Care had
never been excluded from participation in a federal or state healthcare
program. A Superior Healthplan representative testified that Elder Care
affirmed in its contract renewal that it had not hired and would not hire anyone
who had been so excluded. That witness also stated that Elder Care affirmed
it would continuously check to make sure their employees had not been
excluded. In Elder Care’s 2015 re-enrollment as a home health services agency
for DADS, Etti certified that Elder Care and its principals (defined as including
an “officer, director, owner, partner”) were not excluded from participation in
Medicare, Medicaid, or any federal or state healthcare program.
In June 2015, pursuant to Medicare’s regular recertification process,
DADS surveyor Glory Lutrick found discrepancies in Elder Care’s patient files,
completed a suspected provider fraud form, and referred the case for further
investigation. The FBI’s investigation uncovered Okwilagwe’s involvement
with Elder Care through franchise documents filed with the Texas Secretary
of State that listed him as an Elder Care “officer, director, or member” from
2007 to 2010 and from 2013 to 2015. The FBI learned of Emordi’s role through
surveillance, interviews, and its review of company bank records.
When FBI agents went to Elder Care during the investigation, they saw
Emordi’s vehicle in the parking lot. When they asked the office manager if
Emordi was there, she told them he was not. At that moment, the agents saw
Emordi stand up and start to walk away, but they called his name and he came
to them. When they asked Emordi about his exclusion, he initially said he
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knew nothing about it but then recalled his appeal. Emordi stated that Etti
owned Elder Care. During the FBI’s 2016 investigation, agents also
interviewed Okwilagwe and Isidaehomen, who then attempted to contact
Ogabi for the first time since 2012.
Okwilagwe, Emordi, Etti, and Isidaehomen were indicted for conspiracy
to commit healthcare fraud in violation of 18 U.S.C. §§ 1347 and 1349
(Count I). Okwilagwe and Etti were each indicted on two counts of making
false statements in “health care matters,” in violation of 18 U.S.C. § 1035,
based on various filings such as Elder Care’s Molina Healthcare renewal
application (Count II) and its June 2015 statement for the DADS disclosure of
ownership form (Count III), each of which stated that Ogabi was the sole owner
of Elder Care. All defendants pled not guilty. At their joint trial, the
prosecution presented more than 150 exhibits and 12 witnesses. The jury
found all defendants guilty on all counts.
At the sentencing hearing, the district court adopted the presentence
report (“PSR”). The court found an intended loss amount of $3,733,272.40
based on the amounts that were billed to Medicare and Medicaid. To calculate
Okwilagwe’s advisory range under the Sentencing Guidelines, the district
court adopted the PSR’s base offense level of 6 under U.S.S.G. § 2B1.1(a)(2). It
then added 18 levels under Section 2B1.1(b)(1)(J) for the intended loss between
$3.5 million and $9.5 million and 2 levels under Section 2B1.1(b)(2)(A)(i)
because the offense involved 10 or more victims. After several other
enhancements not at issue here, the district court arrived at a total offense
level of 36, which, combined with a criminal history category of I, produced a
range of 188 to 235 months.
Okwilagwe objected to the Section 2B1.1(b)(2)(A)(i) enhancement for an
offense that involved 10 or more victims, and the Section 2B1.1(b)(1)(J)
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enhancement for intended loss between $3.5 million and $9.5 million. These
objections were overruled.
After expressing concern that Okwilagwe was the “mastermind” who
was “running the whole show,” and who concealed his conduct from 2001 to
2016 but nevertheless claimed he had done nothing wrong, the district court
imposed a sentence of 188 months.
The district court ordered $3,559,154.22 in restitution to Medicare and
Medicaid pursuant to the Mandatory Victims Restitution Act of 1996
(“MVRA”). Okwilagwe objected to the restitution amount, and the district
court overruled the objection.
As to Etti, the district court adopted the PSR. Based on an offense level
of 30 and Etti’s criminal history category of I, the court calculated an advisory
Guidelines range of 97 to 120 months. Etti requested a downward departure
to a total of less than 60 months, and the Government requested a within-
Guidelines sentence. The court imposed a sentence of 85 months. After the
sentence was announced, Etti’s counsel stated, without elaboration: “Your
Honor, just for record purposes, we object to the sentence.”
For both Emordi and Isidaehomen, the court calculated a sentencing
range at 97 to 120 months. Emordi was sentenced to 60 months and
Isidaehomen to 97 months.
All four defendants timely appealed.
DISCUSSION
Both Emordi and Isidaehomen claim there was insufficient evidence to
support conviction but make no complaint about the sentencing. Etti and
Okwilagwe, on the other hand, challenge only their sentences. We first will
review the evidence for conviction, then turn to the sentencing issues.
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I. Sufficiency of evidence as to Emordi
Emordi moved for a judgment of acquittal, so we review the sufficiency
of the evidence de novo. United States v. Perez-Ceballos, 907 F.3d 863, 866–67
(5th Cir. 2018). This review, though, is “highly deferential to the verdict. The
relevant question is whether, after viewing the evidence in the light most
favorable to the prosecution, any rational trier of fact could have found the
essential elements of the crime beyond a reasonable doubt.” United States v.
Kuhrt, 788 F.3d 403, 413 (5th Cir. 2015) (citation omitted). We ask only if the
verdict was reasonable, not whether it was correct. Id. Nonetheless, it should
not stand if the Government has merely “pile[d] inference upon inference to
prove guilt.” United States v. Waguespack, 935 F.3d 322, 330 (5th Cir. 2019),
cert. denied, 140 S. Ct. 827 (2020).
Emordi was charged with conspiracy to commit healthcare fraud under
18 U.S.C. §§ 1347 and 1349. The elements of healthcare-fraud conspiracy are
(1) the existence of an agreement between two or more people to pursue the
offense of fraud; (2) knowledge of the agreement; and (3) voluntary
participation. See United States v. Barson, 845 F.3d 159, 163 (5th Cir. 2016).
Knowledge and voluntary participation may be inferred from surrounding
circumstances and a defendant need not have been the one to have personally
submitted the necessary forms to be guilty. Id. at 163–64.
Emordi argues the evidence was not sufficient to support the jury’s
finding that he knew of and voluntarily joined the conspiracy. Essentially,
Emordi argues the evidence showed only that the other defendants carried out
the conspiracy, not that Emordi knew about it or was involved. According to
Emordi, the evidence established that he did nothing to conceal his role at
Elder Care but instead simply showed up to work and received paychecks.
The Government, though, identifies evidence that Emordi knew he was
excluded from working at a Medicare/Medicaid provider. Evidence of that
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knowledge supported that he must also have known his working at Elder Care
was in some way being concealed. This knowledge, combined with
Okwilagwe’s and Etti’s undisputed concealment of Emordi’s role, demonstrates
concerted action from which a reasonable jury could conclude there was no
reasonable doubt that Emordi knew of and joined in the conspiracy. The
Government also discusses that almost immediately after Emordi and
Okwilagwe were excluded for the same underlying fraudulent conduct,
payments from Elder Care started to be made to Emordi’s wife instead of to
him, and that he was evasive during the FBI investigation.
Emordi conceded he was excluded and should not have been working at
Elder Care. The evidence we have summarized was sufficient for a reasonable
jury to find, as this one did, that Emordi knew of and joined the conspiracy.
II. Sufficiency of evidence as to Isidaehomen
Isidaehomen moved for a judgment of acquittal, causing us to review the
sufficiency of the evidence de novo. Perez-Ceballos, 907 F.3d at 866–67. We
have already articulated the highly deferential review standard to be applied.
See Kuhrt, 788 F.3d at 413.
Isidaehomen, like Emordi, was charged with healthcare-fraud
conspiracy under 18 U.S.C. §§ 1347 and 1349, so the required elements for
conviction are the same. Isidaehomen also challenges only the sufficiency of
the evidence as to her knowing of and voluntarily joining the conspiracy. She
argues that it was her husband Okwilagwe who went to Ogabi to obtain
signatures on the company’s founding documents as an owner. Isidaehomen
also argues there was no evidence that she was aware of her husband’s or
Emordi’s exclusions. She also insists that her being shown as the owner along
with her husband does not support a finding that she had knowledge of or
joined the conspiracy to conceal Okwilagwe’s and Emordi’s exclusions.
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We find, though, evidence that supports Isidaehomen’s knowledge and
voluntary participation: (1) she was indicted in the same state court case that
was the basis of Okwilagwe’s and Emordi’s exclusions; (2) she maintained the
relationship with Ogabi and facilitated her husband’s having Ogabi sign the
company’s founding documents; (3) she assured Ogabi in 2007 that Ogabi’s
name would be removed from those documents; (4) tax records show
Isidaehomen had an ownership interest from 2011 to 2014; (5) she became an
authorized signer on the bank account to which Medicaid payments were
received almost immediately after Okwilagwe’s and Emordi’s exclusions
became effective; and (6) for a time after the exclusions became effective,
Isidaehomen began writing checks to Emordi’s wife, Mosunmola, and stopped
writing checks to Emordi.
The question on appeal is whether any rational trier of fact could have
found beyond a reasonable doubt that the Government had through this and
other evidence proven the elements of Isidaehomen’s crime. Kuhrt, 788 F.3d
at 413. Jurors were not irrational in finding Isidaehomen knew of and
voluntarily joined the conspiracy.
III. Sentencing issues as to Okwilagwe
A. Beneficiaries as “victims”
Okwilagwe objected to his two-level enhancement under Section
2B1.1(b)(2)(A)(i) of the Guidelines for an offense involving 10 or more victims.
The preserved objection means we review the district court’s interpretation of
the Guidelines de novo and its factual findings for clear error. See United
States v. Eustice, 952 F.3d 686, 690 (5th Cir. 2020).
Okwilagwe argues that the only “victims” were Medicare and Medicaid,
so there were not 10 or more victims for purposes of Section 2B1.1(b)(2)(A)(i),
and the district court thus erred in applying this enhancement. We have
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already held that “Medicare beneficiaries for whom the conspirators falsely
claimed benefits were ‘victims’ under the Guidelines” because “[a]pplication
Note 4(E) of U.S.S.G. § 2B1.1 defines ‘victim’ in a way that encompasses the
Medicare beneficiaries because it includes ‘any individual whose means of
identification was used unlawfully or without authority.’” Barson, 845 F.3d at
167. As Okwilagwe discusses, the court has not been unanimous in its
conclusion. See Barson, 845 F.3d at 168–69 (Jones, J., concurring in part and
dissenting in part) (disagreeing with majority as to meaning of “victim”);
United States v. Ainabe, 938 F.3d 685, 694–95 (5th Cir. 2019) (Dennis, J.,
concurring) (disagreeing with Barson as to meaning of “victim”).
We note Okwilagwe’s objection and the disagreement in our precedents,
but we are bound by Barson. The district court did not err in imposing this
two-level enhancement.
B. Loss calculation
Okwilagwe objected to the enhancement under Section 2B1.1(b)(1)(J) of
the Guidelines for an intended loss between $3.5 million and $9.5 million. We
review a district court’s method of determining loss de novo. United States v.
St. Junius, 739 F.3d 193, 214 (5th Cir. 2013).
“[T]he amount fraudulently billed to Medicare/Medicaid is prima facie
evidence of the amount of loss the defendant intended to cause.” Id. A district
court reduces loss by “the fair market value of the property returned and the
services rendered . . . to the victim before the offense was detected.” § 2B1.1
cmt. 3(E)(i). A district court “need only make a reasonable estimate of loss,”
and given its “unique position to assess the evidence and estimate the loss”
amount, its “loss determination is entitled to appropriate deference.” § 2B1.1
cmt. 3(C).
Okwilagwe argues that he overcame the presumption that the amount
billed to Medicare and Medicaid was the intended loss. During sentencing
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though, Okwilagwe argued that he had no burden to produce evidence Elder
Care had rendered legitimate services. Okwilagwe offered no evidence to show
that the amount billed overstated his intent. See St. Junius, 739 F.3d at 214.
Nevertheless, Okwilagwe argues that because Elder Care provided at
least some appropriate medical services to patients, the district court erred by
not subtracting the value of these services from its total loss calculation. He
relies on a precedent in which we held a district court erred by not discounting
the fair market value of dispensed medications from its loss calculation.
United States v. Klein, 543 F.3d 206, 213–14 (5th Cir. 2008). In Klein, though,
the defendant had overbilled and coded procedures incorrectly. Id. at 208–09.
The court there recognized that no party disputed “that the patients needed
those drugs and that the insurers would have had to pay for the drugs had [the
defendant] merely written prescriptions.” Id. at 213. In contrast here, had
Medicare and Medicaid been aware of Okwilagwe’s involvement with Elder
Care, they would not have paid any of the claims because of his exclusion.
Okwilagwe analogizes to another case where the district court erred by
not reducing the loss calculation by the value of legitimate services. United
States v. Mahmood, 820 F.3d 177 (5th Cir. 2016). “Medicare would have
reimbursed [the defendant’s] hospitals $430,639 if the claims had been
submitted without [the defendant’s] fraud.” Id. at 194. The court recognized
that if Medicare had known of the defendant’s fraud, it “would not have paid
for the services that [the defendant’s] hospitals rendered to patients,” and if
that had been the case, then the defendant would have been “entitled to no
such credit” for the fair market value of those services. Id. at 193–94.
We have held that because Medicare only pays for treatments that meet
its standards, and services rendered by unlicensed personnel do not meet those
standards, Medicare receives no value from those services. United States v.
Jones, 664 F.3d 966, 984 (5th Cir. 2011). Similarly, because of the exclusions,
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Elder Care’s services were not legitimate because it did not meet Medicare’s
and Medicaid’s standards, and they would not have paid the claims but for the
fraud. So, the district court did not err in its loss calculation.
C. Restitution
Okwilagwe also objected to the restitution amount. We review the
legality of restitution awards de novo; if the award is legally permitted, we
review the amount for abuse of discretion. United States v. Mann, 493 F.3d
484, 498 (5th Cir. 2007). Restitution is limited to the victim’s “actual loss
directly and proximately caused by the defendant’s offense of conviction.”
Mahmood, 820 F.3d at 196. For healthcare-fraud cases, actual loss does not
include any amount an insurer would have paid had the defendant not
committed fraud. Id.
Okwilagwe argues that if he had not committed the fraud of which he
was convicted, Elder Care’s patients still would have received treatment from
some other Medicare/Medicaid provider, suggesting that Medicare and
Medicaid would have paid the same amount even if Okwilagwe had not
committed fraud.
The Government responds that Okwilagwe still has produced no
evidence to support his argument that his patients received legitimate care. It
argues that regardless of whether medical care may have been legitimately
claimed by an entity employing no excluded individuals, the correct “actual
loss” analysis does not involve the question of whether Medicare and Medicaid
might have paid the amount to some other healthcare provider in the absence
of Okwilagwe’s fraud, but whether Medicare and Medicaid would have paid for
the specific services provided by Elder Care absent Okwilagwe’s fraud.
Because Medicare and Medicaid would not have paid any of the claims in the
absence of Okwilagwe’s fraud (i.e., if he had not concealed the exclusions), the
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Government contends that the district court’s calculation of the actual loss
based on the amount actually paid was not in error.
The Government’s argument convinces. Okwilagwe’s conspiracy and
false statements regarding the exclusions caused Medicare and Medicaid to
treat Elder Care as an eligible provider. The claims would not have been paid,
though, if the fraudulent conduct had been known. The district court did not
err by using the amount paid by Medicare and Medicaid, which would not have
occurred without Okwilagwe’s fraud, as actual loss for restitution. See United
States v. Mathew, 916 F.3d 510, 521 (5th Cir. 2019).
IV. Sentencing issues as to Etti
Etti argues that her below-Guidelines sentence of 85 months was
substantively unreasonable. She also concedes that her objection to her
sentence was not based on the specific grounds she now raises, so we review
for plain error. See United States v. Warren, 720 F.3d 321, 332 (5th Cir. 2013).
Etti’s sentence was below the advisory Guidelines range, so we presume
it was reasonable. See United States v. Simpson, 796 F.3d 548, 557 (5th Cir.
2015). This presumption is rebutted only upon a showing that the sentence
does not account for a factor that should receive significant weight, gives
significant weight to an irrelevant or improper factor, or represents a clear
error of judgment in balancing sentencing factors. See United States v. Cooks,
589 F.3d 173, 186 (5th Cir. 2009).
Etti relies on a district court opinion where the court departed downward
from an advisory Guidelines range in sentencing because the defendant, who
had falsified certain documents, did not personally receive monetary benefit
from the fraudulent scheme other than continued employment, expressed
remorse, and seemed to be a law-abiding man who made a poor choice due to
family stress, health problems, and pressure from employers. See United
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States v. Keller, No. 3:04-CR-233-G, 2005 WL 6192897, *6–7 (N.D. Tex. Oct.
17, 2005). Etti argues that she too committed fraud merely to stay employed
by Elder Care, not because she wanted to defraud the government. She
emphasizes that she has been a law-abiding citizen, has no criminal history,
and bore no leadership role in the scheme. She argues her sentence was not
sufficiently different from that of Isidaehomen, who was more culpable yet
received a sentence of 97 months, only 12 more months than Etti’s 85 months.
The district court considered these arguments and the 18 U.S.C.
§ 3553(a) factors in its analysis. Etti’s insistence that the district court should
have balanced the factors differently does not demonstrate unreasonableness.
See United States v. Alvarado, 691 F.3d 592, 597 (5th Cir. 2012). Etti also has
not shown that the district court failed to consider a sentencing factor that
should have received significant weight, gave significant weight to a factor it
should have discounted, or made a clear error of judgment when it balanced
the relevant factors. See Cooks, 589 F.3d at 186. Thus, she has not rebutted
the presumption of reasonableness.
AFFIRMED.
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